First Time Business Loan

Having an innovative business-oriented idea is not enough for an entrepreneur to be able to take advantage of a first time business loan. Acquiring the required finances is typically the main feature when it comes to the financing of any form of a business venture. Even an established business enterprise (a small sized business enterprise, medium, or large sized units) regularly need an injection of fresh finances once in while so as to develop and grow. For this, there exist various options whereby a business owner can avail the required financial assistance in the market. However, it is advisable for an entrepreneur to research and consider the diverse sources and options available to them for financing their business ventures before starting out. This usually gives them a rough idea about who to approach for their first time business loan. In addition, a consideration on how or on when they plan repaying the advanced business loan amounts should be taken into account once availed.

Definitely, there are some unique things to be taken into consideration before starting on a business loan application process, irrespective of whether the loan is for a start up business or for an already established business. The first and foremost thing a business person should do is to verify their credit ratings. In the event of a bad credit history, they should try to repair their score prior to their loan application attempt. If they don’t take the initiative of repairing their poor credit records, then the financial institution they approach are left with no other alternative than to lend a loan with high rates of interest so as to safeguard their investment.

An analysis of first time business loans
To start with, an entrepreneur may finance their business ventures with money from their own personal savings. If this is not a viable option, then they can borrow money from their close family members, business associates and close friends. If the entrepreneur’s business plan is viable and these lenders have confidence in it, then financing their business undertaking becomes a possibility. Otherwise, they can request a first time loan from the normal conventional financial institutions, such as local banks and credit union of which they are members.

Small Business Administration (SBA)
SBAs give out new business loans to business people at very reasonable rates of interest. However, they must be able to contribute 10% of the whole amount of the loan as a down payment in order to qualify. The availed loan money may be utilized in whatever way the business person may deem fit. For instance, buying the business’ machinery or furniture. It could also be utilized as a new business venture’s working capital. These are typically long-term loan products that have repayment periods that range from 7 to 25 years, whilst the amounts that can be availed can achieve a maximum of approximately $2,000,000.

Secured long and short term loans
An entrepreneur may obtain a secured loan facility from any traditional lending institution, though they must provide a form of collateral that corresponds in value to the loan amount required. Basically, collateral is a security pledge that a borrower offers to the lender for instance a borrower’s home, piece of land, car and so forth against the loaned amounts of money. These types of loan are quite easy to acquire and normally comes with very reasonable rates of interest. Nevertheless, it is good for the borrowers to take into consideration the fact that if they default on the usual monthly repayment premiums, then the financial lender has the legal right of taking hold of the pledged security and disposing it so as to recover their investment.

Bad credit first time business loans
For entrepreneurs who are blemished with a poor credit history, acquiring any form of a business loan is usually an uphill task, if not impossible. Most traditional lenders are normally unwilling to avail loans to those with a credit score of less than 650. However, non- traditional lenders may be willing to avail business loans to those with bad credit scores, but at a higher rate of interest. To summarize, choose a first time business loan alternative that best suits your business financial requirements well. If unsure on the procedures and processes of getting hold of first time business loans, then it would be better for the applicant to approach a reputable financial consultant for the right guidance.